Protecting pay and pensions will cost 25,000 jobs
Published 08/12/2010 | 05:00
PUBLIC servants, their managers and unions have been warned the Government's decision to protect their pay, pensions and jobs in the Budget comes at a price agreed with the IMF.
In a stark warning in his Budget speech, Finance Minister Brian Lenihan said the Government had "made commitments" to continue to reduce the cost of the public sector.
"If the Government is to be held to its side of the agreement, those reductions must be delivered," he warned.
He said they must cooperate with a drastic drop of almost 25,000 in the workforce and deliver reforms "in every part and level" of the public service.
Mr Lenihan reminded them that "despite the economic constraints", the Government had abided by the agreement on pay, compulsory redundancies and pensions.
The necessity of the deal delivering on major reforms, including an extra hour's work by teachers and lecturers, longer office opening hours, and redeployment, was a condition of the IMF and EU bailout.
A memorandum of understanding on the €85bn bailout package said there would be a fresh reduction in the wage bill in nine months if there was any shortfall in promised savings.
Although there were no pay cuts for existing public servants in the Budget, it was revealed that secretary generals who would earn more than the Taoiseach after his new pay cut have volunteered to accept a wage reduction to bring them in line with his salary.
The other Budget measures that affect the public sector were largely outlined in the four-year recovery plan.
They include a 10pc cut in the pay levels of new public servants, although the recruitment ban means this is not likely to have a major impact for some time. New recruits must also start on the lowest end of the pay scale. The Budget measures also mean a 4pc average cut in the annual payments to pensioners on more than €12,000 a year. Those on annual pensions above €60,000 will be hit by a 12pc rate.
Mr Lenihan also referred to a planned reduction of almost 25,000 public servants by 2014 by not replacing departing staff.
The largest public sector union denied the Croke Park agreement "shielded" its members from the effects of the Budget. IMPACT general secretary Shay Cody rejected the claims as "ill-informed criticism".
He said tax changes in the Budget would hit public servants the same as everyone else.
"Public service pay has already been cut by over 14pc in less than two years," he added.
However, a disability body warned that there was "no Croke Park agreement" for people with disabilities, as social welfare allowances were hit again.
Inclusion Ireland said the cut meant people on disability allowance were down €847.60 a year since 2008.